Accounting Questions and Answers

The balance c/d on trade creditors will be recorded in the balance sheet as a "short-term liability."

Trade creditors represent amounts owed by a business to its suppliers for goods or services that have been purchased on credit. These amounts are typically expected to be paid within a short period, usually within a year. As a result, trade creditors are classified as short-term liabilities on the balance sheet.

In the given information, the trade creditors balance on December 31, 2021, is $6,000. This represents the amount that the business still owes to its suppliers at the end of the year. Since it is an amount payable in the short term, it will be recorded as a short-term liability on the balance sheet.

Distribution expenses covers the cost of warehousing, transport, material handling and control of finished goods from the moment. It is not charged to manufacturing account.

To determine the total purchase in 2021, we need to sum up the amounts paid for purchases in 2021 and the carriage inwards.

The amounts are as follows:

Paid for purchases in 2021 (cheques): $110,000

Carriage inwards: $1,000

Adding these two amounts together gives us:

$110,000 + $1,000 = $111,000

Therefore, the total purchase in 2021 is $111,000.

Capital expenditure are expenditure incurred on long term project. They usually add to the value of the assets. They are normally paid from development fund.

The double entry system is comparatively an expensive way of maintaining the financial accounts. The accountants may charge a handsome amount as fees. Maintaining incomplete records consumes less time.